Department of Education
Schools Division of Sorsogon
BULAN NATIONAL HIGH SCHOOL
Bulan, Sorsogon
SUMMATIVE TEST 2
Applied Economics
I. MULTIPLE CHOICE: Encircle the letter that corresponds to the correct answer.
1. Economic study and analysis need the application of certain economic concepts and tools to understand
different economic issues and problems. This model graphically demonstrates scarcity,
trade-offs, opportunity costs, and efficiency. It is an illustration that is best used to highlight the economic
problem because if an economy moves from one point on the Production Possibilities Frontier to another,
it involves an opportunity cost as limited and scarce resources are to be diverted from one industry to
another.
A. Production Possibilities Curve C. Production Possibilities Frontier
B. Production Possibilities Table D. Comparative Advantage
2. The following are assumptions of Production Possibilities Graph/ Frontier EXCEPT;
A. Only three goods can be produced C. Fixed technology
B. Full employment of resources D. Fixed resources
3. It is defined as the sustained elevation of an entire society and social system toward a better and more
humane life.
A. Sustainable Development C. Underdevelopment
B. Economic Development D. Economic Growth
4. This theory states that underdevelopment is mainly caused by domestic issues brought about by poor
economic policies and resource allocation, as well as government corruption.
A. Linear Stages of Growth C. Neoclassical Theory
B. O-ring Theory D. Theory of Coordination Theory
5. The theories of economic development propose various models of economic development, which identify
the ideal conditions that make development possible and outline the stages an economy goes through as it
achieves development. These theories also pay close attention to this economic condition characterized by
low production and standard of living.
A. Underdevelopment C. Poverty
B. Sustainable Development D. Inequality
6. Due to its terrain and tropical climate condition, farming and fisheries have been the largest agricultural
sub- sectors in the Philippines. But compared to other industries, there is primary concern regarding the
state of the agriculture, fisheries, and forestry industries. The following are the challenges faced by the
aforementioned industry EXCEPT;
A. Production in agriculture has been affected by typhoons and El Niño phenomenon.
B. Large tracts of agricultural land for are being converted to housing and settlement.
C. Development in agricultural industry is hampered by restrictions on foreign investment and
participation.
D. One factor that contributed to the weak performance of this industry is lack of diversification.
7. Among the significant issues related to Philippine economic development are_______________.
A. poverty, inequality, unemployment, and inflation.
B. low agricultural production, competitiveness, infrastructure and environment.
C. health and quality of life, education, government, and peace and security.
D. All of the above
8. Inflation is the sustained and continual and continual increase in the prices of goods and services. Inflation
also gives rise to economic uncertainty which discourages investments and savings. A period of high
inflation, slow economic growth, and high unemployment is called ___________.
A. hyperinflation C. deflation
B. stagflation D. deflation
9. This occurs when a worker is “between jobs,” which means that he or she has left a job and is looking for
another.
A. seasonal unemployment C. frictional unemployment
B. structural unemployment D. cyclical unemployment
10. The theories of economic development discuss the nature of development and describe tools and strategies
that lead to development. These theories focus on this factor which considers the impact of human
activities on the environment and believes that environmental degradation has significant economic
impact.
A. Level of Production C. Sustainable Development
B. Quality of Life D. All of the above
11. Several theories of development explain how underdevelopment happens, and propose models which will
address underdevelopment and foster economic development. This theory of economic development
suggests that development is a result of efficient production wherein similarly skilled workers work
together to accomplish tasks.
A. Linear Stages of Growth C. New Growth Theory
B. Structural Change Models D. O- ring Theory
12. There are several factors that influence supply. These factors cause the supply curve shifts either to the left
or to the right. One determinant of supply proposes that if firms decide to increase their size or add more
stores or outlets, then this will, in the long run, shift the supply curve to the right.
A. Prices of inputs C. Taxes and subsidies
B. Technology D. Number of sellers in the industry
13. Population size influences demand. If there’s a decrease in the number of families in a certain area due to
out-migration, demand for goods will ____________.
A. increase C. remains the same
B. decrease D. will neither increase nor decrease
14. This occurs when the quantity demanded exceeds the quantity supply and when the price is below the
equilibrium level.
A. surplus C. price floor
B. shortage D. price ceiling
15. A surplus maybe experienced when government sets a __________ above the equilibrium price.
A. price ceiling C. equilibrium
B. price floor D. price control
II. TRUE OR FALSE. Write T if the statement is True. Write F if it is false.
16. A population with a high unemployment rate means that a large portion is unable to engage in productive
work.
17. Employment and underemployment can be addressed by improving the skills of the labor force and
ensuring that they are trained in professions which are important to the economy.
18. The most significant issues regarding health and nutrition in the Philippines involve access to health
services, malnutrition, maternal mortality, and family planning.
19. Corruption still remains a significant concern in governance.
20. Quantity demanded is not dictated by a change in price.
III. Select the determinant of demand and supply being referred to in each sentence. Choose the letter of
the correct answer from the choices below.
A. Income F. Prices of inputs
B. Tastes and preferences G. Technology
C. Changes in speculations H. Taxes and subsidies
D. Population I. Number of sellers or firms
E. Price of related goods like substitutes/complements
21. An increase in monthly salary yields increase in demand for certain goods.
22. In migration results to greater demand for goods.
23. Efficient production through the use of state-of-the art- equipment contributes to increase in outputs.
24. If the price of pork compared to chicken is cheaper, the demand for chicken will decrease.
25. Adding more stores or outlets increases quantity supplied.
Prepared by: Reviewed by: Noted: Approved by:
HENDRISSA D. SICAD RAWDEM P. BITANGCOR JENNY B. BALONA DANILO A. PEREZ
Subject Teacher Subject Group Head- ABM Asst. Principal II- SHS School Principal III